The #1 Problem with Health Insurance for Employers
The following is adapted from Health Insurance Sucks by John Butler.
Most employers can agree that with the United States’ average healthcare spending at $15,000 per employee per year, healthcare is a big problem. Whether you have a company of 50, 500, or 5,000 people, it’s not unusual for your employees’ health insurance to be one of your business’s largest expenses. Worse, the situation gets more dismal every year as healthcare prices continue to rise.
At the heart of this enormous price tag is the number-one problem with the health insurance industry: it’s a rigged system.
The health insurance industry, by design, benefits everyone involved except you — the employer — and your employees. The system is obscure and secretive, so you never know how much you should actually pay for services. In effect, health-insurance providers can charge whatever they’d like — and your company is on the hook for the bill.
Fortunately, there is a solution. To escape the health-insurance trap, you must understand how the system works and the alternatives available to companies like yours.
Trapped in the Health-Insurance Hourglass
To illustrate the main problem with the health-insurance system that keeps employers paying top dollar, I want you to imagine a big hourglass. At the top of the hourglass, we’ll put all of the companies around the country that provide health insurance for their employees.
At the bottom of this hourglass, I want you to imagine every healthcare solution imaginable. This will include every insurance company, pharmacy company, hospital, primary-care doctor, and every other conceivable puzzle piece that encompasses our healthcare system. This will also include every Silicon Valley healthcare strategy and innovation that has come to the market within the last five to ten years.
Now imagine the narrow channel that slowly sifts the sand from the top section of the hourglass into the bottom section. We’ll call this part “the distribution channel.” The only way for the sand to reach the bottom section of that hourglass is to travel through this channel. The problem is that the channel controlling the access to healthcare has a vested interest in keeping prices rising.
In short, it’s a system that purposefully keeps you in the dark and rewards everyone but the employers and their employees.
What’s Happening Behind the Scenes?
The key to finding solutions to expensive health insurance is to understand how the major insurance companies, and their revenue streams, work behind the scenes.
Most health-insurance brokers get paid on commission. Aside from losing your business (and they know most other brokers will give you similar prices), they have little-to-no incentive to find you a better deal. They keep you stuck in the hourglass, which they control, by not even presenting you with better options that would save your company money.
With no restrictions and or limitations on healthcare prices, health-insurance companies can simply increase their plan costs year after year, passing these higher premiums on to employers and their employees. The problem became worse when the Affordable Care Act prohibited health-insurance companies from asking about pre-existing conditions.
These companies knew that the requirement meant they were free to raise premiums across the board — and that’s exactly what they did.
Flipping the Health-Insurance Hourglass
If you and your company are currently stuck in the hourglass, what’s the solution to overwhelming health-insurance prices?
To solve the problem, you have to flip the hourglass upside down. Most brokers, brokerage firms, and insurance companies don’t want you to gain knowledge about these freedom-fighting solution partners in the marketplace. They only want you to see “their solutions” at the bottom of that hourglass.
Flipping the hourglass uncovers a most important word: freedom. When you’re pressured by a broker to stay with the same broken plan year after year, they can charge you anything they want. But if you have freedom of choice, you regain your power. The good news is that there are free-market solutions available to businesses right now: Coalition plans, professional-employer organizations (PEOs), health-reimbursement arrangements (HRAs), and custom health plans.
Each of these is an attractive alternative to traditional health insurance that can lower costs for your company while also giving your employees freedom of choice in where and how they receive care.
Look Outside Traditional Health Insurance
If your company is dealing with insurance rates that increase a minimum of 6 to 8 percent every year, you already know that this upward slope is unsustainable. The problem lies with traditional health insurance, which means the answer should be outside of the traditional solutions.
Look to flip the hourglass upside down. Give your company and employees more freedom in how they access healthcare. Coalition plans, PEOs, HRAs, and custom health plans can all offer alternatives to costly insurance plans. By working around the middlemen driving prices higher, you can pay closer to what healthcare is actually worth, not whatever they feel like charging.
For more advice on reducing healthcare costs, you can find Health Insurance Sucks on Amazon.
John Butler allows his readers to go on offense rather than play defense against skyrocketing premiums and deteriorating benefits. After finding out how to reduce your healthcare costs by 20% — 60%, John will even show you how to set and keep a steady budget for your business healthcare once and for all. In fact, he prides himself at taking all of the rules levied by insurance companies, pharmacy companies, and even our own Federal and State governments and uses those exact same rules to beat them at their own game!
